- USD/CHF eyes to overstep 0.9200 as risk aversion regains its mojo back amid intensified Ukraine crisis.
- The DXY has outperformed on upbeat US Manufacturing PMI and New Orders Index.
- Fed chair Jerome Powell’s testimony will provide real exposure to ongoing monetary policy decision-making.
The USD/CHF pair faced barricades near 0.9200 as investors were shifting their funds into risk-sensitive assets after the market cheered the initial step of a truce taken by Russia and Ukraine. However, the negotiation talks ended without any legitimate outcome, which put the risk-aversion theme back to the crown. This may help the major to surpass 0.9200 and regain its mojo back. That said, USD/CHF ended Tuesday's North American session around 0.9185 and remains mostly unchanged during Wednesday's early Asian trading.
Meanwhile, the US Institute of Supply Management (ISM) reported Manufacturing Purchasing Managers Index (PMI) on Tuesday. The Manufacturing PMI exceeded the market estimates and previous print after landing at 58.6. This has underpinned the greenback against the Swiss franc. Moreover, the monthly US New Orders Index printed at 61.7, outranked the market consensus of 59.1 and prior figure of 57.9.
The outperformance of the US macro indicators has raised the odds of an aggressive tightening monetary policy by the Federal Reserve (Fed). However, real exposure to the strategic decision-making behind the monetary policy announcement on March 16-17 will be observed through the testimony of Fed Chair Jerome Powell, which is due on Wednesday.
The US dollar index (DXY) looks to reclaim Thursday’s high at 97.72 on upbeat US Manufacturing PMI and New Orders Index. Moreover, the anticipation of an interest rate hike will keep the mighty greenback firmer going forward.
Although, the market will majorly respond to headlines from the Russia-Ukraine war, Swiss Consumer Price Index (CPI) data by the Federal Statistical Office on Thursday will hold significant importance too.